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2.—(1) Subject to section 4 (power to cap success fees) of the 2018 Act, a success fee agreement must not require the recipient of relevant services to pay to the provider a success fee which, including VAT, exceeds the maximum amount provided for by these Regulations (“the success fee cap”).
(2) The success fee cap is determined by reference to the financial benefit obtained by the recipient (“the financial benefit”).
(3) In a matter that is, or could become, a claim for damages for personal injuries(1) or the death of a person from personal injuries, the success fee cap is—
(a)in respect of the first £100,000 of the financial benefit, 20%,
(b)in respect of the amount of the financial benefit over £100,000 but not exceeding £500,000, 10%,
(c)in respect of the amount of the financial benefit over £500,000, 2.5%.(2)
(4) In a matter that is, or could become, the subject of proceedings before an employment tribunal, the success fee cap is 35% of the financial benefit.
(5) In any other matter to which these Regulations apply, the success fee cap is 50% of the financial benefit.
(6) Where in connection with the same matter a recipient receives relevant services from more than one provider, whether under one or more success fee agreements, the success fee cap applies to the total amount payable by the recipient to those providers.
In these Regulations, “personal injuries” has the same meaning as in section 6 (personal injury claims) of the 2018 Act.
Section 6 (personal injury claims) of the 2018 Act makes provision for which damages may be included in the calculation of the financial benefit obtained.
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Policy Note sets out a brief statement of the purpose of a Scottish Statutory Instrument and provides information about its policy objective and policy implications. They aim to make the Scottish Statutory Instrument accessible to readers who are not legally qualified and accompany any Scottish Statutory Instrument or Draft Scottish Statutory Instrument laid before the Scottish Parliament from July 2012 onwards. Prior to this date these type of notes existed as ‘Executive Notes’ and accompanied Scottish Statutory Instruments from July 2005 until July 2012.
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